Glossary

Budget: A plan to balance income and expenses

Commission: A percentage of a sale received by the salesperson

Compound Interest: Interest that is calculated based off of the original sum PLUS any value previously gained

Credit: The trust between a lender and the borrower

Currency: A system of money that is in use in a particular country

Debt: Money that is owed or due

Emergency Fund: A reserve of funds kept in case of unexpected expenses

Exchange Rate: The value of one country’s currency compared to another’s

Expenses: Money spent on necessities

Fee: A payment made to someone for a service

Gratuity: A tip given on top of the original fee

Income: Money received for work or through investments

Income Tax: A type of tax that governments impose on income generated by businesses and individuals

Interest: Money paid regularly at a particular rate

Loan: Money that is borrowed that you pay back with interest

Mortgage: A loan used to buy a home or land

Principal: The original sum of money borrowed in a loan or put into an investment

Rent: A regular payment to a landlord for the use of property or land

Salary: A fixed amount of money paid to an employee

Sales Tax: A tax imposed by the government on the sale of goods and services

Simple Interest: Interest that is calculated based off of the original sum, or principal

Tax: A financial charge that funds government spending

Wage: An amount of money paid per hour of work